Johnson & Johnson refills drug cabinet with $30 billion Actelion deal

Thu Jan 26, 2017 12:15pm EST
 
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By John Miller and Paul Arnold

ALLSCHWIL, Switzerland (Reuters) - U.S. healthcare giant Johnson & Johnson (JNJ.N: Quote) will buy Swiss biotech company Actelion (ATLN.S: Quote) in a $30 billion all-cash deal that includes spinning off Actelion's research and development pipeline, the companies said on Thursday.

The biggest European drugs takeover in 13 years gives J&J access to the Swiss group's range of high-price, high-margin medicines for rare diseases, helping it diversify its drug portfolio as its biggest product, Remicade for arthritis, faces cheaper competition.

The offer to pay $280 per share, following weeks of exclusive talks, was unanimously approved by the boards of directors of both companies.

The deal represents a 23 percent premium to Actelion's closing price on Wednesday and is more than 80 percent above the Nov. 23 closing price before reports emerged that Europe's biggest biotech company had attracted takeover interest.

Actelion shares jumped 20 percent to 273.30 francs by 1350 GMT as investors welcomed the deal.

"The structure is very attractive," said Eleanor Taylor Jolidon, a fund manager at Union Bancaire Privee in Geneva, a top-40 Actelion investor.

The price vindicates the strategy of cardiologist Jean-Paul Clozel, who co-founded the company with his pediatrician wife Martine and friends in 1997, and has fended off bids over the years in the belief he could increase Actelion's value by keeping it independent.

"The price is quite high at around 30 times price to estimated 2018 earnings. J&J is paying a lot and R&D is not even included, just a substantial minority stake," one Zurich-based trader said.   Continued...

 
A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017.   REUTERS/Mike Blake